Verizon & HBO Now Streaming Media Deal: Analyst Insights

According to a recent article in Multichannel News, Verizon Communications has signed a multiplatform deal that will allow the telecom to offer HBO's streaming video service, HBO Now, to more than 100 million of Verizon's digital customers, as well as to non-Verizon mobile device owners. Verizon will offer HBO on its mobile-first video service and to stand-alone broadband customers for $15 a month.

According to Parks Associates director of research Brett Sappington, at the introduction of its HBO Now service, HBO mentioned its intent to partner with broadband providers to reach the cord cutting and cord never crowd. This move is a follow-through on that strategy.

Verizon provided a preview of their mobile video strategy when they secured local in-market rights to NFL broadcasts, so offering HBO Now fits this strategy as well, according to Parks Associates digital media analyst Glenn Hower. This strategy specifically creates the same single-billing relationship between consumer and provider that HBO’s traditional customers enjoy, and it allows HBO to continue offering its service through distributors rather than going direct-to-consumer.

Parks Associates consumer research shows:

There will be over 200 million online video viewers in North America by 2016, with consumers 18-24 leading the way.

Among U.S. broadband households with a pay-TV subscription, 15% are very interested in at least one OTT service, compared to 9% of households without a pay-TV subscription.

In 2014, 7% of U.S. broadband households reported they were likely to subscribe to HBO's OTT video service.

For more information on Parks Associates digital media research, click here. To request a briefing or interview with Brett or Glenn on this research, contact Holly Sprague via email.